Miller Magazine Issue: 115 July 2019

90 MARKET ANALYSIS MILLER / JULY 2019 The burrowing cost for large producers will increase to 8% this year up from 7% last year. The interest rates for small and medium producers is subsidized by the government and could be as low as 3%. The Minister of Agriculture indicated that the higher interest rates for larger producers was needed in the face of very tight budgets and a desire to hold down the budget deficit. The Minister also indicated that the 2019/20 Harvest Plan places increased emphasis on small producers and subsidized crop insurance. Recent rains have slowed the harvest of soybeans and corn in Argentina as well as the planting of the winter wheat crop. According to the BAGE, the 2018/19 soy- bean crop is 99.1% harvested with 150,000 hectares left to harvest in southern Buenos Aires province and in northern Chaco province. In the northern locations, re- cent rains and localized flooding have delayed the soy- bean harvest for approximately 15 days. The corn crop in Argentina is 44.2% harvested which represents an advance of only 1.9% for the week. In the core production areas, the corn is 90-95% harvested with 40-60% harvested in southern Argentina and ap- proximately 10% harvested in far northern Argentina. Crop yields in Argentina are setting records this year. The soybean crop ended very strong with record nationwide yields at 49.8 bu/ac, corn yield at 142.7 bu/ac. Farmers in Argentina are expected to plant 6.4 million hectares of wheat and the wheat planting is 49.7% complete. Plant- ing has been delayed by recent wet weather. In many areas of Argentina, June rainfall has been above normal. Even though the rainfall has de- layed planting, the benefit of all the rain is that it is providing good soil moisture for the start of the winter wheat crop. USDA stay at 20 MMT and IGC see 19.7 MMT. Anyway, it’s higher 2018/19 with 19,5 MMT wheat production. EU and the Black Sea started early grain har- vesting. Winter wheat and rapeseeds in Ukraine also on truck. For 8th of July Ukraine harvested more than 11.3mmt of grain from 3.4 mln ha or 35% planted areas: • wheat 7.3 mmt/2.1 mln ha or 32% of the fore- cast; • barley 3.6 mmt/1.1 mln ha/43%; • peas 402k mt/187k ha/66% • winter rapeseeds 1.1 mmt/519k ha/40% Total grains production in Ukraine soon reached 100 MMT, exports could be compared with Rus- sian. As per Russia, wheat production highly depends on weather condition. Hot, dry and lack of soil moisture re- port pushes local analyst to cut the expectation. It looks already much less 80 MMT vs previous 80+mmt num- bers, Ukrainian –up to 29 MMT. GASC tenders, so long from April, give to the market new indicative price: 209-211 USD/MT C&F is the lowest since June 2018. According to USDA, world wheat stock to use ratio now at ~39%, the highest for the last 30 years. But as corn overpriced, and weather could impact production levels and quality in the next month, wheat could get support. Barley also couldn’t fine high price as Ukraine production 19/20 ~9 MMT vs 7.6 MMT 18/19, exports 4.5 MMT vs 4.2 MMT YtY. Russian barley production expectations 18 MMT vs 16,737 MMT last year, exports also increase up to 5.3 MMT from 4.8 MMT in 18/19. MARS cut EU barley yields this year from 4.96 t/ha to 4.92 t/ha. decrease exceeds the avg 5-year figure by 1.2%. Spring barley re- duced from 4.2 t/ha to 4.14 t/ha. decrease exceeds last year’s figure by 3.5%. But in relation to the avg 5-year indicator, it is 0.5% less. World barley production +8% YtY, exports just +6%. SAGO tendered 720 kMT for Red Sea ports 2H August – 1H October for avg price 191.42 USD/MT and 180 kMT for Arabian Gulf ports 1H Sep- tember – 1H October for avg 202.53 USD/MT. So the red line for the new season will be weather condi- tion for next month and the USA policy. Yes, again.